Topic: Periodic Account Statements
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Under the new Illinois unclaimed property law, if we mail monthly statements for checking accounts that also display certificate of deposit (CD) balances, is that an “indication of interest”?
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No, mailing a statement to a customer does not constitute an indication of interest by that customer. Under the Illinois RUUPA, generally an “indication of interest” requires some activity by the customer, such as increasing or decreasing the account balance or communicating with your bank. Also, in this scenario, both accounts appear on the same…
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We are offering a new savings account where we disclose that we will automatically send electronic account statements unless the customer opts to pay a small fee for paper statements. Some customers have indicated that they don’t want either electronic or paper statements. Can we honor that request? The savings accounts can receive electronic funds transfers.
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No, we do not believe that it would be appropriate to honor a customer’s request to not send statements for a deposit account, due to federal and state laws pertaining to electronic fund transfers, as well as checks. For any account that allows electronic fund transfer (EFT) activity, Regulation E requires monthly periodic statements for…
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Our bank procedures require us to obtain a customer signature or online authentication before we update a customer’s address. However, we have a customer with a delinquent commercial loan who appears to be avoiding our bank. The mail that we send to the customer’s address on file keeps being returned as undeliverable. We have obtained the customer’s new address. Can we update the address without obtaining the customer’s signed authorization?
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Yes, we believe that you may update the address on file without obtaining the customer’s authorization. In fact, it is advisable to discontinue loan periodic statements to an address that you know is incorrect, in order to prevent the customer’s statements containing financial information from falling into the wrong hands.
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If we fail to send out a final periodic statement for a closed demand deposit account held by a consumer, does that violate Regulation DD?
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No, we do not believe that it violates Regulation DD to fail to send out a final periodic statement for a closed account. However, you may be required to send a periodic statement under Regulation E or the terms of your account agreement. Regulation DD does not require banks to provide periodic statements; it only…
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When we renew a HELOC, we charge certain renewal-related loan fees that we classify as finance charges. What is the appropriate way to disclose these renewal-related loan fees on a periodic statement? If we treat the renewal as a new loan and issue a new “first” statement, our software would permit us to include the renewal-related fees as “start up” charges that we could add to the finance charge. However, if we treat the renewal as a continuation of the existing HELOC and issue a regular periodic statement, our software does not permit us to include the renewal-related loan fees as part of the finance charge. Our HELOC renewals typically involve extending the maturity date and adjusting the interest rate. We use Regulation Z’s “home secured” format for our periodic statements.
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We do not have enough information to determine exactly how to classify your “renewal-related” loan fees. However, if you include the fees as part of the finance charge, Regulation Z’s “home-secured” periodic statement rules require the fees to be itemized and identified on a periodic statement, regardless of whether it is the first periodic statement…
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Are there any Illinois laws that require us to provide check images to our customers? We currently provide images of all checks paid in our periodic account statements, but we would like to eliminate the cost of printing check images.
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No, we are not aware of any Illinois laws that require banks to provide check images in deposit account statements. The Uniform Commercial Code (UCC) requires bank statements to include “information sufficient to allow the customer to identify the items paid.” However, that UCC requirement is met if a bank’s statements describe each check “by…
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We have a customer whose account statements keep being returned as undeliverable. The executor of the customer’s estate has notified us that the customer passed away, but so far has not requested any documents from us. Can we stop sending out the account statements? Also, we have another customer whom we strongly believe passed away; although we have no notice of his death, his statements also are being returned as undeliverable. Can we stop sending out those statements, too?
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Yes, your bank may discontinue mailing out the account statements for both customers. You are not required to continue mailing periodic statements when they repeatedly are being returned as undeliverable. In fact, it is advisable to discontinue mailing periodic statements to a customer that you know or believe is dead or to an address that…
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Our bank does not qualify as a small servicer. Can we charge a fee to mortgage loan borrowers who choose to receive paper periodic statements instead of e-statements?
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We believe such a charge would violate the Real Estate Settlement Procedures Act (RESPA). The RESPA prohibits a servicer from charging a fee for certain mortgage statements, including those required by the Truth in Lending Act (TILA). The TILA requires larger servicers (such as your bank) to provide periodic loan statements for residential mortgage loans.…
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Do we need to retain our trust department’s monthly account statements? If so, for how long? Our system is not capable of reproducing information found on account statements for the trust accounts, so the only source of past transactional and other information would be the account statements themselves. Currently, we retain these monthly statements electronically for seven years.
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Disclaimer: The Electronic Commerce Security Act (ECSA) was repealed and replaced with the Uniform Electronic Transaction Act (UETA), effective June 25, 2021. Please note that this change may affect the continued accuracy of this guidance as it pertains to the ECSA. We are unaware of any law or regulation that sets a required retention period for…
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We would like to hold a drawing for all of our customers who sign up for our new free e-statements service. The service is available on some free accounts and some fee-based accounts. Each person who signs up for the e-statements service will receive a chance to win an iPad. Will this violate the state and federal prohibitions on lotteries?
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Any drawing or raffle that is limited to bank customers, or to a certain group of bank customers, would likely violate both federal and Illinois restrictions on lotteries. The Federal Deposit Insurance Act defines “lottery” as an arrangement in which participants “advance money or credit to another in exchange for the possibility or expectation that…